Gold ignores Fed rate hike talk, stays on front foot

Risk-off in Asia and the resulting safe haven demand overshadowed hawkish talk from Fed officials and kept Gold well bid heading into Europe.

Bounced off 50-DMA support

Fresh demand came in as the metal bounced-off its 50-DMA level of $1216 in Asia. Asian equities fell on oil and Fed rate hike talk, triggering a flight to safety. Fed’s Rosegren was slightly hawkish via his comments in the NY session, while Evans said two rate hikes are “appropriate” this year.

However, metal traders did not pay attention to the rate hike talk as markets seem convinced Fed may not be able to move rates in the near-term. Ahead in the day, broader market sentiment and US ISM non-manufacturing figure could influence the metal.

Gold Technical Levels

Gold currently trades around $1226 levels. The immediate support is seen at $1215 (50-DMA), under which prices could drop to $1200. A break lower would expose $1191.53 (Oct 15 high). On the higher side, a break above $1240 (Feb 18 high) would shift risk in favor of a rise to $1244.12 (Mar 30 high) and $1253.32 (Feb 24 high).